How much of Q1 slowdown is due to Brexit fears?

Softening activity indicators and the moderation in quarterly GDP growth from 0.6% in Q4 to 0.4% in Q1 have fuelled a number of warnings, notably from Chancellor George Osborne and the OECD, that the threat of leaving the EU has been weighing on economic activity. But with a number of other factors at play, we suspect that the impact of referendum uncertainty is only part of the story.

Of course, there is still a risk that Brexit jitters will further sap the recovery of its momentum in Q2. But even if growth did continue to slow, as long as the UK voted to stay in the EU, it would probably bounce back in the second half of this year.